Republicans stand with Wall Street
Hawke
Senate minority leader Mitch McConnell met with hedge fund managers last
week to work out a deal where they would give the republicans big
donations and in return the republicans would stop any reforms of the
banking industry.
It was announced later in the week that all 41 republican senators would
oppose the banking reform bill and would filibuster to stop it.
So there you have it. What is wrong with America. Wealthy corporate
interests are able to tell the congress what they want and they get it,
and venal congressmen, republicans in this case, are willing to do
anything they are paid to do. So much for our "democracy".
Hawke
F. George McDuffee
============
Most unfortunately this does not appear to be solely due to the
elected personalities/individuals, because if it were, a
replacement of a simple majority would "fix" the problem, i.e.
"throw the bums out."
Rather the entire system/structure of government is becoming
increasingly dysfunctional, which is not surprising, given the
extraordinarily intensive, extensive and rapid changes in the
domestic U.S. economy [globalization/deindustrialization] and
U.S. society/culture with minimal changes in the form, structure
and operation of government at all levels.
What was designed/developed for the governance of rural and small
town population has apparently reached it's limits of its
evolution or adaptability with the rise of a multi-cultural,
tetra-urban, polyglot, trans-national majority population.
The regulatory agencies are exhibiting the same inconsistent
behavior.
http://www.marketwatch.com/story/goldman-had-9-months-warning-from-sec-report-2010-04-17?reflink=MW_news_stmp
April 17, 2010, 5:14 p.m. EDT
Goldman warned of SEC suit 9 months ago: report
Investment bank could be exposed to a raft of private lawsuits
By Alistair Barr, MarketWatch
SAN FRANCISCO (MarketWatch) -- Goldman Sachs Group Inc. was
warned nine months ago that Securities and Exchange Commission
staff wanted to bring a civil case against it, but the investment
bank didn't specifically disclose this to investors in regulatory
filings, Bloomberg News reported Saturday, citing unidentified
people it credited with direct knowledge of the communications.
<snip>
FWIW -- it appears that even if Goldman Sachs is put out of
business, their executives sentenced long prison terms, with
massive disgorgement of personal wealth, nothing will change
because the system that allowed/encouraged Goldman Sachs and many
other financial firms to flourish at the expense of the people
was not changed. When you always do what you've always done,
you'll always get what you always got. To paraphrase Winston
Churchill when he was First Lord of the Admiralty, about the
possibility of a successful surprise attack by the Imperial
German navy, "The goal of the Royal Navy is not to see they won't
do it, the goal of the Royal Navy is to see they *CAN'T* do it."
Unka George (George McDuffee)
..............................
The past is a foreign country;
they do things differently there.
L. P. Hartley (1895-1972), British author.
The Go-Between, Prologue (1953).
F. George McDuffee
<gmcd...@mcduffee-associates.us> wrote:
<snip>
>Rather the entire system/structure of government is becoming
>increasingly dysfunctional, which is not surprising, given the
>extraordinarily intensive, extensive and rapid changes in the
>domestic U.S. economy [globalization/deindustrialization] and
>U.S. society/culture with minimal changes in the form, structure
>and operation of government at all levels.
>
>What was designed/developed for the governance of rural and small
>town population has apparently reached it's limits of its
>evolution or adaptability with the rise of a multi-cultural,
>tetra-urban, polyglot, trans-national majority population.
>
>The regulatory agencies are exhibiting the same inconsistent
>behavior.
==========
And another zinger....
http://online.wsj.com/article/SB10001424052702304506904575180441067747062.html?mod=WSJ_hpp_sections_news
http://topnews.us/content/217179-ots-termed-watchdog-no-bite-senator-washington-mutual-case
http://www.nytimes.com/2010/04/17/business/17crisis.html?src=busln
http://www.marketwatch.com/story/key-senator-ots-created-wamu-mortgage-time-bomb-2010-04-16?reflink=MW_news_stmp
http://online.wsj.com/article/SB10001424052702303695604575181754106834516.html?mod=rss_Today%27s_Most_Popular
Hawke
The simple answer to this clear cut corruption of the government is to
switch to a publicly financed election system. The funds the people in
congress get from these large corporations are almost exclusively in the
form of campaign contributions. You have to take the money out of the
equation. As long as they can get away with funneling money to the
politicians the system will remain one that is bought and paid for by
the special interests. Step one is to get that money out of the system.
The only way to do that is to publicly finance our elections. Until that
happens everything still remains the same. The question is will we ever
be able to eliminate the corrupt private financing of elections. Until
elections are funded by the public no other improvements can hope to
happen. Funny isn't it that you hear about going to the public financing
so infrequently? Do you think that's because both the members of
congress and the people with the money really, really, do like it just
the way it is now? Since they like it so much why does the public
continue to let them have it their way?
Hawke
Larry Jaques
<gmcd...@mcduffee-associates.us> scrawled the following:
>with the rise of a multi-cultural,
>tetra-urban, polyglot, trans-national majority population.
Holy Shit, Batman! I betcha can't say that 3 times really fast.
---
A book burrows into your life in a very profound way
because the experience of reading is not passive.
--Erica Jong
Winston
(...)
> FWIW -- it appears that even if Goldman Sachs is put out of
> business, their executives sentenced long prison terms, with
> massive disgorgement of personal wealth, nothing will change
> because the system that allowed/encouraged Goldman Sachs and many
> other financial firms to flourish at the expense of the people
> was not changed.
If those three things were to happen, it would signal a
fundamental and earthshaking change in the system, yes?
Then Wall Street would likely demand a partial refund on
their purchase of D.C.
"It isn't broken and we want it FIXED!".
:)
--Winston
John R. Carroll
> On 4/17/2010 4:11 PM, F. George McDuffee wrote:
>
> (...)
>
>> FWIW -- it appears that even if Goldman Sachs is put out of
>> business, their executives sentenced long prison terms, with
>> massive disgorgement of personal wealth, nothing will change
>> because the system that allowed/encouraged Goldman Sachs and many
>> other financial firms to flourish at the expense of the people
>> was not changed.
>
> If those three things were to happen, it would signal a
> fundamental and earthshaking change in the system, yes?
It would signal that America had taken another step down the road to
becoming become just another banana republic.
--
John R. Carroll
Winston
Let's say that I sell you a product that I know is worthless
and will almost certainly cause you to lose a large amount
of time and money. Let's say that I game the system
so that the product appears to be well regarded and a good
value; I use that to convince you to buy.
Is that not fraud and theft in their purest form?
Why would that not be investigated and punished within
a financial system propped up by the appearance (if not the
actual presence) of honorable commerce?
Prosecution would be a step towards the 'rule of law', yes?
The financial system we have now is "ruled by a small, self-elected,
wealthy, and corrupt clique", is that not so?
http://en.wikipedia.org/wiki/Banana_republic
--Winston
Ignoramus9593
> Let's say that I sell you a product that I know is worthless
> and will almost certainly cause you to lose a large amount
> of time and money. Let's say that I game the system
> so that the product appears to be well regarded and a good
> value; I use that to convince you to buy.
Exactly.
Let's say that I sold you a lathe that was made of parts handpicked to
fail, greased with abrasive added to grease, pee instead of oil, etc.
Furthermore, assume that my client actually built this lathe so that
it will fail as early as possible, say to eliminate competition (just
to make this example more realistic).
I know that full well, sell you a lathe like that, and say "here's a
lathe, as far as I know it is great, it runs, but it is sold AS IS".
Then the lathe fails in 2 weeks.
Would I be a fraud? Yes. Would saying something like "but the buyer
considered hilself sophisticated", absolve me from responsibility?
No.
i
John R. Carroll
They haven't been charged with, or done, anything criminal.
Goldman also didn't do what your hypothetical implies. At least it doesn't
appear so. You, of all people, should know that.
The deals were done by separate divisions of Goldman by people that had
never even heard of each other, let alone conspired against their customers
and it isn't against the law to for one house to take both sides of the same
deal.
They certainly appear to have a civil problem but they didn't break a single
criminal statute and that's what it takes to end up in prison.
I distinctly recall "a long prison sentence" being mentioned in the original
post.
Unless the civil case uncovers criminal wrong doing, there won't be any jail
time and there shouldn't be.
That might, however, be exactly what happens and at the highest level. It's
starting to look like all of this was orchestrated by GS's executive
officers and management. That's an entirely different kettle of fish and it
is criminal.
All of this is a perfect example of the reason behind keeping insured
deposit instruments and the companies engaged in that financial activity
completely divorced from speculative enterprises/hedge fund activity. When
that isn't done, stealing has been legalized.
That is exactly what has been going on between the law and a concerted
effort not to rigorously enforce laws, rules and regulations that are
already on the books.
Enron, on the other hand, did violate a multitude of criminal statutes.
The first among those was money laundering, not pissed off investors or
shareholders.
--
John R. Carroll
Winston
> Ignoramus9593 wrote:
>> On 2010-04-19, Winston<Win...@bigbrother.net> wrote:
>>> Let's say that I sell you a product that I know is worthless
>>> and will almost certainly cause you to lose a large amount
>>> of time and money. Let's say that I game the system
>>> so that the product appears to be well regarded and a good
>>> value; I use that to convince you to buy.
>>
>> Exactly.
>>
>> Let's say that I sold you a lathe that was made of parts handpicked to
>> fail, greased with abrasive added to grease, pee instead of oil, etc.
>>
>> Furthermore, assume that my client actually built this lathe so that
>> it will fail as early as possible, say to eliminate competition (just
>> to make this example more realistic).
>>
>> I know that full well, sell you a lathe like that, and say "here's a
>> lathe, as far as I know it is great, it runs, but it is sold AS IS".
>>
>> Then the lathe fails in 2 weeks.
>>
>> Would I be a fraud? Yes. Would saying something like "but the buyer
>> considered hilself sophisticated", absolve me from responsibility?
>> No.
Nicely put, Ig.
> They haven't been charged with, or done, anything criminal.
Bill Moyers Journal that aired last night:
http://video.pbs.org/video/1471123509/#
"SIMON JOHNSON: (...) the person who nailed this intellectually a
long time ago was from the University of Chicago. George Stigler.
Not a man of the left. He got a Nobel Prize for his observation.
All regulated industries end up with the industry capturing the regulators."
It's a little disingenuous to claim that nothing criminal took place
only because the captured regulators were told to regard broad
categories of theft as 'technically legal'.
--Winston
John R. Carroll
I follow Moyers to the extent possible and he's just excellent.
There isn't anything "disingenuous" about such a claim at all.
You and Ig are placing the failure of both the voters and regulatory
agencies on the backs of the regulated.
I'm not condoning GS's behavior in any way, I'm saying that putting people
in jail anytime someone gets mad is a bad idea.
Even promoting that possibility is counterproductive.
As close as there is to a silver bullet to our current dilemma would have
been to trade derivative products on regulated exchanges.
At that point, most of the behavior that proved so problematic wouldn't have
happened because all of the sleights of hand would have been obvious in real
time.
Another mistake was in letting money, real money as demand deposits, get
into the hands of businesses that are speculative by nature.
Goldman Sach's is a bank and they shouldn't be unless they want to divest
their investment banking and hedge fund divisions.
All of these companies were granted the power to print alternative
currencies that were backed by their actual currency based demand deposit
operations. Only an idiot would expect them not to have gone ahead and done
just that when it could be done in a completely opaque environment. They
would actually have been failing in their duty to shareholders had they not.
The final failure of our government was the lack of any resolution authority
whatsoever.
Having allowed the comingling of previously seperated types of financial
services operations, the resolution authority and mechanisms weren't updated
to reflect the new reality.
None of this couldn't have happened in the face of a well informed, active
and motivated electorate.
America did itself and what's "disingenuous" is claiming otherwise.
--
John R. Carroll
F. George McDuffee
===========
John Carroll appears to be exactly correct when he observes that
until and unless a new super Glass-Stegall is enacted and
enforced, and derivative trading is either outlawed [contracts
not enforceable in the courts] or confined to regulated specialty
exchanges, nothing is going to change in the world of the
banksters. I would add that a "small enough to fail" cap may
also be required for both market share and total capitalization
if things are to be brought under control.
Consider what happened in Chicago. Elliott Ness, the
"Untouchables" and many other brave and dedicated law enforcement
personnel managed to nail Al Capone and send him away for a long
stretch in prison [income tax IIRC]. This was *NOT* the end of
the syndicate in Chicago, or anywhere else. Big Al went to the
slammer, and paid some fines, but the system was not changed, so
only the names of a few of the people running things changed.
We do not allow the interstate sale of mis-branded, adulterated,
or impure food in the United States. While occasionally
ineffective, the FDA acts to prevent systemic violations, and the
CDC tracks outbreaks of food born illnesses after they occur. The
FTC commission will also act in the case of fraudulent
misbranding resulting in unfair competition, preventing a "race
to the bottom."
http://www.sacbee.com/2010/02/27/2569124/hed-here.html#mi_rss=Our%20Region
I can see no reason why similar constant and strict oversight is
not now required for financial products/services, given the
proliferation and the increasingly large fraction of the
population now directly affected through their IRAs, 401ks, etc.
when the financial markets "go south." ==>Everyone is indirectly
affected because of the effects on employment and demands for
governmental [i.e.taxpayer] "rescue" efforts, e.g. government
[formerly known as general] motors, Chrysler, Chase, Citibank,
AIG, etc. etc.<==
Winston
> Winston wrote:
(...)
>> It's a little disingenuous to claim that nothing criminal took place
>> only because the captured regulators were told to regard broad
>> categories of theft as 'technically legal'.
>>
>
> I follow Moyers to the extent possible and he's just excellent.
>
> There isn't anything "disingenuous" about such a claim at all.
Here is the definition I intended:
Not noble; unbecoming true honor or dignity; mean; unworthy; fake or deceptive.
What definition of the term did you intend?
> You and Ig are placing the failure of both the voters and regulatory
> agencies on the backs of the regulated.
In what way was Goldman Sachs 'regulated'?
That is the entire point. They simply chose to not be 'regulated'.
Are they guilty? Should their upper management be investigated?
I think so.
Lloyd Blankfein should also be required to change his legal name
to Max Bialystock, (but that's just me).
http://www.imdb.com/title/tt0063462/
> I'm not condoning GS's behavior in any way, I'm saying that putting people
> in jail anytime someone gets mad is a bad idea.
> Even promoting that possibility is counterproductive.
>
> As close as there is to a silver bullet to our current dilemma would have
> been to trade derivative products on regulated exchanges.
The regulators would presumably continue to be the same individuals
that have been purchased by Wall Street? I sense a potential problem
with that plan but I can't quite put my finger on it. :)
> At that point, most of the behavior that proved so problematic wouldn't have
> happened because all of the sleights of hand would have been obvious in real
> time.
To whom? Goldman Sachs was quite aware of what they were doing, all
protestations to the contrary notwithstanding. Does anyone else matter?
Apparently not.
> Another mistake was in letting money, real money as demand deposits, get
> into the hands of businesses that are speculative by nature.
> Goldman Sach's is a bank and they shouldn't be unless they want to divest
> their investment banking and hedge fund divisions.
We agree there.
> All of these companies were granted the power to print alternative
> currencies that were backed by their actual currency based demand deposit
> operations. Only an idiot would expect them not to have gone ahead and done
> just that when it could be done in a completely opaque environment. They
> would actually have been failing in their duty to shareholders had they not.
Have we fallen so low that fraud is considered 'due diligence'?
> The final failure of our government was the lack of any resolution authority
> whatsoever.
> Having allowed the comingling of previously seperated types of financial
> services operations, the resolution authority and mechanisms weren't updated
> to reflect the new reality.
They were only doing what they were told to do by their owners, after all.
> None of this couldn't have happened in the face of a well informed, active
> and motivated electorate.
Had you known for certain in October of 2008 that Goldman Sachs was going to
defraud investors of a billion dollars by selling them instruments based on
worthless mortgage securities, what would you have done to prevent them
from getting their TARP loan?
The universe is expanding but what can we as individuals do? :)
> America did itself and what's "disingenuous" is claiming otherwise.
Nonsense. America was 'done' by Wall Street.
--Winston
Winston
If that is the case then we are in 'violent agreement'.
If the government put GS out of business,
sentenced their executives to long prison terms and
forced them to relinquish the booty, they could only
do so within an appropriate legal structure.
It ain't gonna happen.
--Winston
Ignoramus9593
I never suggested that the fraud was criminal.
i
Gunner Asch
Fraud is always criminal
Mistakes are not.
Which are you referring to?
Gunner
"First Law of Leftist Debate
The more you present a leftist with factual evidence
that is counter to his preconceived world view and the
more difficult it becomes for him to refute it without
losing face the chance of him calling you a racist, bigot,
homophobe approaches infinity.
This is despite the thread you are in having not mentioned
race or sexual preference in any way that is relevant to
the subject." Grey Ghost
John R. Carroll
You didn't.
Winston did. George would probably have. He has in the past IIRC.
I wrote a sort of "catch-all" response.
Blaming Goldman for something they and everyone else didn't actually do will
only distract from any effective effort to
impliment effective or meaningful regulatory reform.
The guys doing the reform are elected representatives of the people and if
we get crappy reform it won't be the fault of crappy legislators. It will be
the result of crappy voters and a process that's been corrupted by
organizations like Fox News to make a buck off of peoples natural emotional
response to catastrophe. That's something that shouldn't be legal either but
can't really be legislated.
Market forces ought to discourage the practice but there are a lot of sheep.
That's why I say American's have done themselves. The real truth is that
American's demanded the screwing we've all gotten.
LOL
--
John R. Carroll
John R. Carroll
Trading derivatives on an open exchange would cause the market to work
appropriately.
You'd be able to see the Goldman divisions operating in real time. Investors
aren't stupid, they just can't see in the dark.
Transparency is the key. The CFMA of 2000 turned out the lights.
--
John R. Carroll
F. George McDuffee
<gunne...@gmail.com> wrote:
<snip>
>Fraud is always criminal
<snip>
Actually no. There is "civil fraud," which may also be "criminal
fraud." It depends on the scale, i.e. number of people and the
amount of money involved, intent, planning and a number of other
factors.
see
http://www.answerbag.com/q_view/307056
http://en.wikipedia.org/wiki/Fraud
While "civil fraud" is easier to prove, i.e. the standard is
"preponderance of the evidence," criminal cases require "proof
beyond a reasonable doubt" It appears from the media reports that
Goldman-Sachs with their Abacus scam crossed well over into
"criminal fraud" territory.
It is clear that number of conspirators were involved, large
amounts of planning/coordination were required, considerable
"front money" was provided, and while a question for the courts
to decide, it appears that the CDO investor losses were planned
from the start to benefit the co-conspirator hedge fund manager,
who stood no real chance of any loss.
As is frequently the case, this also meets the requirements for
"criminal conspiracy."
http://criminal.findlaw.com/crimes/a-z/conspiracy.html
http://en.wikipedia.org/wiki/Conspiracy_%28crime%29
Indeed, if two prior felony counts can be sustained in court, the
Goldman-Sachs corporation and the individuals involved may well
qualify for a RICO prosecution with disgorgement of any profits
that resulted. FWIW -- there are also "civil RICO" actions.
http://www.lectlaw.com/files/lit08.htm
http://www.justice.gov/usao/eousa/foia_reading_room/usam/title9/110mcrm.htm
http://www.monteleonelaw.com/CivilRICOReportReprint020104.pdf
What is becoming increasingly evident is that the SEC, other
regulatory agencies [state and federal] and "law enforcement"
[state and federal] had [and has] more than ample justification
to investigate and prosecute. The introduction of yet more
regulations and statutes, that won't be enforced, will accomplish
nothing.
Winston
(...)
> Trading derivatives on an open exchange would cause the market to work
> appropriately.
From the trader's point of view, yes? (Huge grin)
> You'd be able to see the Goldman divisions operating in real time. Investors
> aren't stupid, they just can't see in the dark.
Which is a great stimulus to keep the lights off.
> Transparency is the key. The CFMA of 2000 turned out the lights.
And that is just the way Wall Street likes it.
--Winston
Gunner Asch
<gmcd...@mcduffee-associates.us> wrote:
>On Mon, 19 Apr 2010 13:04:35 -0700, Gunner Asch
><gunne...@gmail.com> wrote:
><snip>
>>Fraud is always criminal
><snip>
>Actually no. There is "civil fraud," which may also be "criminal
>fraud." It depends on the scale, i.e. number of people and the
>amount of money involved, intent, planning and a number of other
>factors.
George....Civil fraud doesnt involve many many millions of dollars.
>
>see
>http://www.answerbag.com/q_view/307056
>http://en.wikipedia.org/wiki/Fraud
>
>While "civil fraud" is easier to prove, i.e. the standard is
>"preponderance of the evidence," criminal cases require "proof
>beyond a reasonable doubt" It appears from the media reports that
>Goldman-Sachs with their Abacus scam crossed well over into
>"criminal fraud" territory.
Indeed they did.
>
>It is clear that number of conspirators were involved, large
>amounts of planning/coordination were required, considerable
>"front money" was provided, and while a question for the courts
>to decide, it appears that the CDO investor losses were planned
>from the start to benefit the co-conspirator hedge fund manager,
>who stood no real chance of any loss.
>
>As is frequently the case, this also meets the requirements for
>"criminal conspiracy."
>http://criminal.findlaw.com/crimes/a-z/conspiracy.html
>http://en.wikipedia.org/wiki/Conspiracy_%28crime%29
>
Ayup.
>
>Indeed, if two prior felony counts can be sustained in court, the
>Goldman-Sachs corporation and the individuals involved may well
>qualify for a RICO prosecution with disgorgement of any profits
>that resulted. FWIW -- there are also "civil RICO" actions.
>http://www.lectlaw.com/files/lit08.htm
>http://www.justice.gov/usao/eousa/foia_reading_room/usam/title9/110mcrm.htm
>http://www.monteleonelaw.com/CivilRICOReportReprint020104.pdf
>
Gota love RICO when taking on a large organization.
>
>What is becoming increasingly evident is that the SEC, other
>regulatory agencies [state and federal] and "law enforcement"
>[state and federal] had [and has] more than ample justification
>to investigate and prosecute. The introduction of yet more
>regulations and statutes, that won't be enforced, will accomplish
>nothing.
>
But..if they put the entire management in prison for 5-20 yrs..it will
give a bit of pause to the next nefarious scofflaw...and there are
enough people out there who are guilty of Criminal Fraud in the
industry..that a very very good and widespread example can be made of
them.
Not to mention impoverishing each and everyone of them to get the money
back....
Gunner
>
>Unka George (George McDuffee)
>..............................
>The past is a foreign country;
>they do things differently there.
>L. P. Hartley (1895-1972), British author.
>The Go-Between, Prologue (1953).
F. George McDuffee
<gunne...@gmail.com> wrote:
<snip>
>But..if they put the entire management in prison for 5-20 yrs..it will
>give a bit of pause to the next nefarious scofflaw...and there are
>enough people out there who are guilty of Criminal Fraud in the
>industry..that a very very good and widespread example can be made of
>them.
>Not to mention impoverishing each and everyone of them to get the money
>back....
>
>Gunner
Indeed it would ==>IF WE WERE DEALING WITH NORMAL PEOPLE.<== The
problem is, almost by definition, the people running the
financial firms [and other mega corporations] are egomaniacs and
sociopaths in their manic phase. Operationally we are dealing
with beings from another planet.
IMNSHO: The only real effect on this "elite" group that would
result from the mass conviction and imprisonment, even with
individual disgorgement of profits, of the Goldman-Sachs "outfit"
and its dons, cappos and "button men," would be to reinforce
their belief "I am smarter than those G/S people, because I have
not been caught, and I won't get caught if I learn from the G/S
mistakes."
John Carroll's observations that we must enact a new "super"
Glass-Steagall, and require that derivatives including "synthetic
collateralize debt obligations" such as Abacus, are both closely
regulated and traded only on specialty exchanges with publicly
accessible records, including prices and parties, appears to be
exactly correct, if we are to avoid another financial meltdown in
a few years. I would add "small enough to fail" caps on both
market share and capitalization and "fire walls" between firms
are also required, if future taxpayer rescue of private firms is
to be avoided or at least minimized. The result desired is not
that they won't do it -- the result desired is they *CAN'T* do
it.
John R. Carroll
> On 4/19/2010 12:00 PM, John R. Carroll wrote:
>> Winston wrote:
>
> (...)
>> wouldn't have happened because all of the sleights of hand would
>> have been obvious in real time.
>
> To whom? Goldman Sachs was quite aware of what they were doing, all
> protestations to the contrary notwithstanding. Does anyone else
> matter?
To anyone who wanted to see what was being traded, in what notional amounts
and by whom.
When you can see, in real time, that a seller is betting against one of
there own products, you have a hard look at that product.
>> None of this couldn't have happened in the face of a well informed,
>> active and motivated electorate.
>
> Had you known for certain in October of 2008 that Goldman Sachs was
> going to defraud investors of a billion dollars by selling them
> instruments based on worthless mortgage securities, what would you
> have done to prevent them
> from getting their TARP loan?
I was writing about this sort of behavior from personal experience in 2003
and 2004. Right here in this newsgroup in fact.
It should have been obvious to anyone as early as 2005 and there has always
been a large cadre of well respected and experienced people calling
attention to the issue.
Warren Buffet, for example, called derivative products weapons of mass
financial destruction or something like that.
He spent 400 million dollars to get them out of General RE and to get
General RE out of that business. Warren Buffet, John Bogle, Ed Gramlich -
the list is very long, learned, experienced, and distinguished.
In the absence of a resolution authority like the FDIC for non banks, TARP
was a distasteful necessity.
Nothing I knew in 2008 about G/S would have caused me to oppose it. TARP
adressed a completely different issue.
I think a lot gets lost in the politics of all of this when it comes to the
deal everyone involved has made - and it is everyone, including the American
public.
--
John R. Carroll
John R. Carroll
> On Mon, 19 Apr 2010 15:08:00 -0700, Gunner Asch
> <gunne...@gmail.com> wrote:
> <snip>
> Glass-Steagall, and require that derivatives including "synthetic
> collateralize debt obligations" such as Abacus, are both closely
> regulated and traded only on specialty exchanges with publicly
> accessible records, including prices and parties, appears to be
> exactly correct, if we are to avoid another financial meltdown in
> a few years. I would add "small enough to fail" caps on both
> market share and capitalization and "fire walls" between firms
> are also required, if future taxpayer rescue of private firms is
> to be avoided or at least minimized. The result desired is not
> that they won't do it -- the result desired is they *CAN'T* do
> it.
That's right and the big driver will be that it will end up being bad for
business if they do. Sales will collapse.
That it is illegal is almost secondary. Whatever legislation ends up being
passed, the best lawyers on Wall Street will be finding ways around it the
same way thieves set about defeating ever better locks.
That is how good laws really work.
--
John R. Carroll
Winston
> Winston wrote:
>> On 4/19/2010 12:00 PM, John R. Carroll wrote:
>>> Winston wrote:
>>
>> (...)
>>> At that point, most of the behavior that proved so problematic
>>> wouldn't have happened because all of the sleights of hand would
>>> have been obvious in real time.
>>
>> To whom? Goldman Sachs was quite aware of what they were doing, all
>> protestations to the contrary notwithstanding. Does anyone else
>> matter?
>
> To anyone who wanted to see what was being traded, in what notional amounts
> and by whom.
> When you can see, in real time, that a seller is betting against one of
> there own products, you have a hard look at that product.
Goldman Sachs is not about to do anything likely to reduce the very
profitable smokescreen they have carefully developed. I was being
flip when I asked 'Does anyone else matter?'
Goldman is certain that no one else matters.
>>> None of this couldn't have happened in the face of a well informed,
>>> active and motivated electorate.
>>
>> Had you known for certain in October of 2008 that Goldman Sachs was
>> going to defraud investors of a billion dollars by selling them
>> instruments based on worthless mortgage securities, what would you
>> have done to prevent them
>> from getting their TARP loan?
>
> I was writing about this sort of behavior from personal experience in 2003
> and 2004. Right here in this newsgroup in fact.
> It should have been obvious to anyone as early as 2005 and there has always
> been a large cadre of well respected and experienced people calling
> attention to the issue.
>
> Warren Buffet, for example, called derivative products weapons of mass
> financial destruction or something like that.
> He spent 400 million dollars to get them out of General RE and to get
> General RE out of that business. Warren Buffet, John Bogle, Ed Gramlich -
> the list is very long, learned, experienced, and distinguished.
>
> In the absence of a resolution authority like the FDIC for non banks, TARP
> was a distasteful necessity.
> Nothing I knew in 2008 about G/S would have caused me to oppose it. TARP
> adressed a completely different issue.
My point was that Goldman can do whatever Goldman wants to do.
There isn't a carrot or stick available to you or me that will
cause them to begin to behave themselves.
> I think a lot gets lost in the politics of all of this when it comes to the
> deal everyone involved has made - and it is everyone, including the American
> public.
What did the American Public do to deserve this economic collapse?
Too much _American Idol_?
Blaming the poor, blind, confused, frustrated, jobless, panic stricken
victim does not usually solve any problem.
--Winston
John R. Carroll
> On 4/19/2010 5:43 PM, John R. Carroll wrote:
>> Winston wrote:
>>> On 4/19/2010 12:00 PM, John R. Carroll wrote:
>
> My point was that Goldman can do whatever Goldman wants to do.
> There isn't a carrot or stick available to you or me that will
> cause them to begin to behave themselves.
No they can't.
>
>> I think a lot gets lost in the politics of all of this when it comes
>> to the deal everyone involved has made - and it is everyone,
>> including the American public.
>
> What did the American Public do to deserve this economic collapse?
> Too much _American Idol_?
Vote for it. Repeatedly and in spite of their own known best interests.
>
> Blaming the poor, blind, confused, frustrated, jobless, panic stricken
> victim does not usually solve any problem.
You have to admit a mistake in order to learn from it.
--
John R. Carroll
Michael A. Terrell
Really? Your computer's clock is wrong, so learn how to set it.
--
Anyone wanting to run for any political office in the US should have to
have a DD214, and a honorable discharge.
John R. Carroll
> "John R. Carroll" wrote:
>>
>> Winston wrote:
>>> On 4/19/2010 5:43 PM, John R. Carroll wrote:
>>>> Winston wrote:
>>>>> On 4/19/2010 12:00 PM, John R. Carroll wrote:
>>>
>>> My point was that Goldman can do whatever Goldman wants to do.
>>> There isn't a carrot or stick available to you or me that will
>>> cause them to begin to behave themselves.
>>
>> No they can't.
>>
>>>
>>>> I think a lot gets lost in the politics of all of this when it
>>>> comes to the deal everyone involved has made - and it is everyone,
>>>> including the American public.
>>>
>>> What did the American Public do to deserve this economic collapse?
>>> Too much _American Idol_?
>>
>> Vote for it. Repeatedly and in spite of their own known best
>> interests.
>>
>>>
>>> Blaming the poor, blind, confused, frustrated, jobless, panic
>>> stricken victim does not usually solve any problem.
>>
>> You have to admit a mistake in order to learn from it.
>
>
> Really? Your computer's clock is wrong, so learn how to set it.
Is it?
It's the same as the computer set to NIST.
--
John R. Carroll
Winston
> Winston wrote:
>> On 4/19/2010 5:43 PM, John R. Carroll wrote:
>>> Winston wrote:
>>>> On 4/19/2010 12:00 PM, John R. Carroll wrote:
>>
>> My point was that Goldman can do whatever Goldman wants to do.
>> There isn't a carrot or stick available to you or me that will
>> cause them to begin to behave themselves.
>
> No they can't.
Watch them and remember the adage about 'absolute power',
would be my advice. I could be horribly mistaken; you
have my permission to rub my nose in it if we see these
folks doing a perp walk on national TV:
Lloyd C. Blankfein
David A. Viniar
Gary D. Cohn
John S. Weinberg
Michael J. Evans
Michael Sherwood
Alan Cohen
Gregory Palm
Esta Stecher
John H. Bryan
Claes Dahlbäck
Stephen Friedman
William W. George
Rajat K. Gupta
James A. Johnson
Lois D. Juliber
Lakshmi N. Mittal
Ruth J. Simmons
>>> I think a lot gets lost in the politics of all of this when it comes
>>> to the deal everyone involved has made - and it is everyone,
>>> including the American public.
>>
>> What did the American Public do to deserve this economic collapse?
>> Too much _American Idol_?
>
> Vote for it. Repeatedly and in spite of their own known best interests.
I don't remember a referendum requesting permission to sell
the Securities and Exchange Commission to the highest bidder.
I very much doubt that I would have voted for it, even once.
Show of hands, please. Who voted to sell the SEC to Wall Street?
How much did you get for them and where is my share?
>> Blaming the poor, blind, confused, frustrated, jobless, panic stricken
>> victim does not usually solve any problem.
>
> You have to admit a mistake in order to learn from it.
Can you elaborate please?
Are you referring to the election of Bush 43?
Do you honestly think anyone on Wall Street cares who is in the White House?
Because whoever is in the White House has only one question for
Wall Street: 'How high, sir?'
--Winston
Michael A. Terrell
Then your messages are showing up before they were posted.
John R. Carroll
> "John R. Carroll" wrote:
>>
>>>
>>>
>>> Really? Your computer's clock is wrong, so learn how to set it.
>>
>> Is it?
>> It's the same as the computer set to NIST.
>
>
This was posted at 4:25 am.
What do you see?
--
John R. Carroll
John R. Carroll
> On 4/19/2010 6:28 PM, John R. Carroll wrote:
>> Winston wrote:
>>> On 4/19/2010 5:43 PM, John R. Carroll wrote:
>>>> Winston wrote:
>>>>> On 4/19/2010 12:00 PM, John R. Carroll wrote:
>>>
>>> My point was that Goldman can do whatever Goldman wants to do.
>>> There isn't a carrot or stick available to you or me that will
>>> cause them to begin to behave themselves.
>>
>> No they can't.
>
> Watch them and remember the adage about 'absolute power',
> would be my advice. I could be horribly mistaken; you
> have my permission to rub my nose in it if we see these
> folks doing a perp walk on national TV:
>
> Lloyd C. Blankfein
> David A. Viniar
> Gary D. Cohn
> John S. Weinberg
> Michael J. Evans
> Michael Sherwood
> Alan Cohen
> Gregory Palm
> Esta Stecher
> John H. Bryan
> Stephen Friedman
> William W. George
> Rajat K. Gupta
> James A. Johnson
> Lois D. Juliber
> Lakshmi N. Mittal
> Ruth J. Simmons
I'd be really surprised to see Bill George walking anywhere.
>
>>>> I think a lot gets lost in the politics of all of this when it
>>>> comes to the deal everyone involved has made - and it is everyone,
>>>> including the American public.
>>>
>>> What did the American Public do to deserve this economic collapse?
>>> Too much _American Idol_?
>>
>> Vote for it. Repeatedly and in spite of their own known best
>> interests.
>
> I don't remember a referendum requesting permission to sell
> the Securities and Exchange Commission to the highest bidder.
> I very much doubt that I would have voted for it, even once.
Sure you do.
The last was the one where Grover Norquist was all the rage for wanting to
shrink government to the point where it could be drowned in a bathtub.
>
> Show of hands, please. Who voted to sell the SEC to Wall Street?
> How much did you get for them and where is my share?
>
>>> Blaming the poor, blind, confused, frustrated, jobless, panic
>>> stricken victim does not usually solve any problem.
>>
>> You have to admit a mistake in order to learn from it.
>
> Can you elaborate please?
> Are you referring to the election of Bush 43?
That was the last but hardly the first.
The jerks and jackasses have been taking over in both houses of Congress for
three decades.
To the applause of a majority of the voters, I might add.
You can't explain Phil Gramm or Dick Armey any other way.
--
John R. Carroll
Michael A. Terrell
8:26 AM
John R. Carroll
> "John R. Carroll" wrote:
>>
>> Michael A. Terrell wrote:
>>> "John R. Carroll" wrote:
>>>>
>>>>>
>>>>>
>>>>> Really? Your computer's clock is wrong, so learn how to set
>>>>> it.
>>>>
>>>> Is it?
>>>> It's the same as the computer set to NIST.
>>>
>>>
>>> Then your messages are showing up before they were posted.
>>
>> This was posted at 4:25 am.
>> What do you see?
>>
>> --
>> John R. Carroll
>
>
> 8:26 AM
Google and my three computers here have it at 4:26 am.
<shrug> Go figure.
Is this a mistake one of us can learn from.
RAMł
news:2LudnQAkY85JbVDW...@giganews.com:
FWIW, Your response, John, was time-stamped
"Date: Tue, 20 Apr 2010 11:22:08 -0800"
And my newsreader reports it as "02:22P".
John R. Carroll
"RAMł" <s31924...@netscape.net> wrote in message
news:Xns9D609DA14861E...@74.209.131.10...
This one was sent at 2:22 pm from a NIST machine.
JC
Winston
(...)
> This one was sent at 2:22 pm from a NIST machine.
I show:
Date: Tue, 20 Apr 2010 14:23:07 -0700
My RTC is probably off a little, though. :)
--Winston
__
Gary was a liar, a thief, a scoundrel and a psychologist.
He was the most redundant man I ever met.
John R. Carroll
> On 4/20/2010 2:23 PM, John R. Carroll wrote:
>
> (...)
>
>> This one was sent at 2:22 pm from a NIST machine.
>
> I show:
> Date: Tue, 20 Apr 2010 14:23:07 -0700
>
> My RTC is probably off a little, though. :)
>
>
Weird...
This one was sent at 3:23 pm and I've turned DST on and reset the clock.
I wonder what Wes is seeing?
Maybe Terrell is just screwing with me.
Made Me Look Michael!
Winston
Maybe not. From your header, I got:
Date: Tue, 20 Apr 2010 15:39:29 -0700
My RTC appears to be 2 seconds in front of:
http://www.time.gov/
Considering the number of layers, that ain't too bad.
OTOH, I have seen some of *my* messages go on to USENET with
very incorrect time stamps as well, even with a 'good enough'
RTC setting.
--Winston <-- Sent at 3:53 PM PST
--
Winston
> --Winston <-- Sent at 3:53 PM PST
That was (embarrassed cough) 3:53 PM PDT, rather.
--Winston
Michael A. Terrell
Laugh all you want, but your messages are the only ones arriving
before the 'sent' time.
Larry Jaques
<Win...@bigbrother.net> scrawled the following:
>On 4/20/2010 3:53 PM, Winston wrote:
>
>> --Winston <-- Sent at 3:53 PM PST
>
>That was (embarrassed cough) 3:53 PM PDT, rather.
OH, sure. We always knew you lived in a different dimension, but time
zone, too?
--
"I think you very well may see a revolution in this country and
it will not be a revolution to overthrow the government," he said.
"It would be a revolution to restore government to its constitutional
basis." --Rob Weaver on VoA, 4/19/10
Winston
> OH, sure. We always knew you lived in a different dimension, but time
> zone, too?
I figure I can explore all 11 dimensions if I'm in the right 'Zone'.
http://www.youtube.com/watch?v=NzlG28B-R8Y&feature=related
Larry Jaques
<Win...@bigbrother.net> scrawled the following:
>On 4/20/2010 10:20 PM, Larry Jaques inscribed:
>
>> OH, sure. We always knew you lived in a different dimension, but time
>> zone, too?
>
>I figure I can explore all 11 dimensions if I'm in the right 'Zone'.
Sure you can, son. Now take your Lithium like a good boy and go play
in the street.
>http://www.youtube.com/watch?v=NzlG28B-R8Y&feature=related
Ahhhh. Good memories of growing up, watching TwiZo with the whole
family every week. Thank you, Rod Serling.
>Gary was a liar, a thief, a scoundrel and a psychologist.
>He was the most redundant man I ever met.
Bwahahahahahaha!
Winston
> Sure you can, son. Now take your Lithium like a good boy and go play
> in the street.
Not again, Mr. Hyde?
:)
--Winston
Hawke
> Winston wrote:
>> On 4/19/2010 10:08 AM, John R. Carroll wrote:
>>> Ignoramus9593 wrote:
>>>> On 2010-04-19, Winston<Win...@bigbrother.net> wrote:
>>>>> Let's say that I sell you a product that I know is worthless
>>>>> and will almost certainly cause you to lose a large amount
>>>>> of time and money. Let's say that I game the system
>>>>> so that the product appears to be well regarded and a good
>>>>> value; I use that to convince you to buy.
>>>>
>>>> Exactly.
>>>>
>>>> Let's say that I sold you a lathe that was made of parts handpicked
>>>> to fail, greased with abrasive added to grease, pee instead of oil,
>>>> etc.
>>>>
>>>> Furthermore, assume that my client actually built this lathe so that
>>>> it will fail as early as possible, say to eliminate competition
>>>> (just to make this example more realistic).
>>>>
>>>> I know that full well, sell you a lathe like that, and say "here's a
>>>> lathe, as far as I know it is great, it runs, but it is sold AS IS".
>>>>
>>>> Then the lathe fails in 2 weeks.
>>>>
>>>> Would I be a fraud? Yes. Would saying something like "but the buyer
>>>> considered hilself sophisticated", absolve me from responsibility?
>>>> No.
>>
>> Nicely put, Ig.
>>
>>> They haven't been charged with, or done, anything criminal.
>>
>> Bill Moyers Journal that aired last night:
>>
>> http://video.pbs.org/video/1471123509/#
>>
>> "SIMON JOHNSON: (...) the person who nailed this intellectually a
>> long time ago was from the University of Chicago. George Stigler.
>> Not a man of the left. He got a Nobel Prize for his observation.
>> All regulated industries end up with the industry capturing the
>> regulators."
>>
>> It's a little disingenuous to claim that nothing criminal took place
>> only because the captured regulators were told to regard broad
>> categories of theft as 'technically legal'.
>>
>
> I follow Moyers to the extent possible and he's just excellent.
>
> There isn't anything "disingenuous" about such a claim at all.
> You and Ig are placing the failure of both the voters and regulatory
> agencies on the backs of the regulated.
> I'm not condoning GS's behavior in any way, I'm saying that putting people
> in jail anytime someone gets mad is a bad idea.
> Even promoting that possibility is counterproductive.
>
> As close as there is to a silver bullet to our current dilemma would have
> been to trade derivative products on regulated exchanges.
> At that point, most of the behavior that proved so problematic wouldn't have
> happened because all of the sleights of hand would have been obvious in real
> time.
>
> into the hands of businesses that are speculative by nature.
> Goldman Sach's is a bank and they shouldn't be unless they want to divest
> their investment banking and hedge fund divisions.
>
> All of these companies were granted the power to print alternative
> currencies that were backed by their actual currency based demand deposit
> operations. Only an idiot would expect them not to have gone ahead and done
> just that when it could be done in a completely opaque environment. They
> would actually have been failing in their duty to shareholders had they not.
>
> The final failure of our government was the lack of any resolution authority
> whatsoever.
> Having allowed the comingling of previously seperated types of financial
> services operations, the resolution authority and mechanisms weren't updated
> to reflect the new reality.
>
> None of this couldn't have happened in the face of a well informed, active
> and motivated electorate.
>
I agree with you in only one sense. The public did this to themselves.
When they voted in free market fundamentalist republicans and gave them
complete control of the government, in effect they were voting for that
fundamentalist agenda. Now, not all Americans did that but enough did so
that the Bush regime had the seal of approval from the majority. Did
they really understand what they were getting? Of course not. Most
people would not believe it if you told them the government's attitude
towards business would be business can do anything it wants and we won't
interfere with it. After all, by allowing business a free hand to do as
it wants it will bring about prosperity for everyone. At least that is
what they thought. Rational people know that if business isn't watched
by government it will run wild. But the fundamentalists belief is that
no rules is good rules and that is what they did. Did they dismantle the
regulatory apparatus, no. But they did fill the place with like minded
people who would not do their job of regulating business. After creating
this no rules on business administration it was inevitable that there
would be a bust some time down the road. The fundamentalists are blind
to this outcome and the electorate thought they gave the power to
financially responsible republicans. Both were wrong. So who is to
blame? The people who voted in Bush, the Bush administration, and the
business community.
So now we know who to blame what are we going to do to make sure it
doesn't happen again? I mean besides not ever electing another
fundamentalist republican administration.
Hawke
Hawke
>>> It's a little disingenuous to claim that nothing criminal took place
>>> only because the captured regulators were told to regard broad
>>> categories of theft as 'technically legal'.
>>>
>>
>> I follow Moyers to the extent possible and he's just excellent.
>>
>> There isn't anything "disingenuous" about such a claim at all.
>> You and Ig are placing the failure of both the voters and regulatory
>> agencies on the backs of the regulated.
>> I'm not condoning GS's behavior in any way, I'm saying that putting people
>> in jail anytime someone gets mad is a bad idea.
>> Even promoting that possibility is counterproductive.
>
>
> i
Why not? If something is purposefully done fraudulently that is a crime.
What's criminal and what's not is a matter of opinion. You have the
elements of a crime but you have to have a district attorney that
believes those elements have been met. I guarantee you that a lot of
people would judge that many of the things these financial institutions
did are frauds. But if it's a republican who decides that question you
will find they find they are not. That's why it matters who wins the
election. With republicans in power you find that very few cases against
business are pursued because right wing leaning prosecutors just don't
think anything businesses do is a crime. Just like what happened here.
Hawke
Winston
(...)
> I agree with you in only one sense. The public did this to themselves.
(...)
> I mean besides not ever electing another
> fundamentalist republican administration.
You are absolutely right. I just don't understand folks that claim
there is no difference between 'left' and 'right'; that these are
merely distractions to keep us from considering Wall Street as
the real source of all political power.
Here is the deal for folks who still cling to that belief:
In a Republican administration, the poor are prevented from becoming
poorer until after the rich become richer.
In a Democratic administration, the rich are forced to become richer
before the poor are permitted to become poorer.
Night and day.
--Winston
--
John R. Carroll
> On 4/19/2010 12:00 PM, John R. Carroll wrote:
>> Winston wrote:
>>> On 4/19/2010 10:08 AM, John R. Carroll wrote:
>> None of this couldn't have happened in the face of a well informed,
>> active and motivated electorate.
>> America did itself and what's "disingenuous" is claiming otherwise.
>>
>
>
> I agree with you in only one sense. The public did this to themselves.
> When they voted in free market fundamentalist republicans and gave
> them complete control of the government, in effect they were voting
> for that fundamentalist agenda. Now, not all Americans did that but
> enough did so that the Bush regime had the seal of approval from the
> majority. Did they really understand what they were getting? Of
> course not.
The American working class has bought into the thinking that if they devalue
themselves enough, they will still have a job.
The result is less prosperity and a devalued brand.
This is what killed General Motors.
--
John R. Carroll
Przemek Klosowski
> Warren Buffet, for example, called derivative products weapons of mass
> financial destruction or something like that. He spent 400 million
> dollars to get them out of General RE and to get General RE out of that
> business. Warren Buffet, John Bogle, Ed Gramlich - the list is very
> long, learned, experienced, and distinguished.
>
The real scandal is that those folks got punished because they missed
the profits of speculation before the bubble burst, and then missed the
TARP and other bailouts, because they were financially sound.
Just like the residential mortgages---folks who bought a house they could
pay for, and who didn't second-mortgage their equity when prices peaked,
will end up helping to bail out their less responsible brethren. I really
hope that the mortgage readjustment programs will have some sort of a
claw-back clause, because it would really be unfair if people would be
able to get their mortgage reduced now, and then profited from eventual
real estate appreciation. My suggestion would be to help underwater
mortgages by extending a zero-interest-rate loan for the negative equity
amount, that stays with the property until the appreciation wipes it out.
By the way, if the government bailed out institutions that made the wrong
bets, who is on the other side of the trade? I read that 10 to 20 B$ of
AIG bailout went directly to foreign counterparties. I would like for
someone to do a global accounting of this money flow, and see a global
picture.
Przemek Klosowski
> Trading derivatives on an open exchange would cause the market to work
> appropriately.
> You'd be able to see the Goldman divisions operating in real time.
> Investors aren't stupid, they just can't see in the dark. Transparency
> is the key. The CFMA of 2000 turned out the lights.
Agreed, even with transparency it may be hard to compete with them. Do
you know that major stock exchanges sell co-location space in their
computer enters, which gives big players who can afford it a, say, 1ms
latency to the transaction stream instead of 1 s that everybody else
sees? Remember the Russian guy who was arrested for stealing computer
code from Goldman Sachs
http://www.wired.com/threatlevel/2009/07/aleynikov/
He was doing this kind of thing. No wonder GS went ballistic, and FBI
obliged.
Bill McKee
"Przemek Klosowski" <prz...@tux.dot.org> wrote in message
news:hr5bs6$g4m$3...@news.eternal-september.org...
Warren Buffet has $63 Billion of CDO's. He is asking for the existing
contracts to still be traded off exchange. Well we are for the law, just
exempt us. Nice.
John R. Carroll
Buffet is concerned with the consequences of AIG's, BofA's, Citi's and
Goldman's crap will have on Berkshire's valuation as a company. I doubt that
what he's holding is toxic because of the research BH always does on what
they own. That won't matter, of course. Collateral damage has been the
boogie man behind nearly every action that's been taken to get a handle on
financial markets.
--
John R. Carroll
Bill McKee
"John R. Carroll" <nu...@bidness.dev.nul> wrote in message
news:QJWdnVuwuMYUzEvW...@giganews.com...
Does not matter if they are toxic or not. Is the principal. Publically
support the law and then try to be exempt from same law. What would you say
if Obama said they would regulate every bank, and then give an exemption to
his advisors favorite. Goldman-sachs?
John R. Carroll
> Publically support the law and then try to be exempt from same law.
> What would you say if Obama said they would regulate every bank, and
> then give an exemption to his advisors favorite. Goldman-sachs?
LOL
That's almost exactly what's been going on for two years now in the hope
that the exemptions and other consideration will be in the interests of the
greater good.
What I would say is that I wouldn't be pussy footing around so much. I don't
know how the financial services industry would react specifically to
re-enactment of Glass-Stegal or the repeal of CFMA-2000 but I know that they
would find a way to survive and prosper because it's what they DO. One firm,
or more even, might go away but others will come into being to fill any gap.
America is a 14 trillion dollar economy and nobody is going to walk away
with that kind of money on the table. Where the will wants not, a way opens.
Count on it.
--
John R. Carroll
Joseph Gwinn
"Bill McKee" <bmckee...@ix.netcom.com> wrote:
What Buffet is asking is that the rules not be changed retroactively, on
existing contracts. In other words, he is asking Congress not to make ex post
facto laws. If Congress refuses, there will be a Supreme Court case asking that
the constitutional prohibition against ex post facto laws be enforced.
Joe Gwinn
John R. Carroll
There won't be a court challenge.
There is no reason Congress can't now impose exchange trading conditions and
if Buffet is concerned, he can dump his position before the law takes
effect. " ex post facto" would only come into play if there was a
requirement now to disclose prior trading activity to the public beyond what
had been required. From what I've seen and read, there is no such condition
in the works and even the old law had settlement and disclosure deadlines
which were just ignored because the requirement was unenforceable. CFMA 2000
specifically prohibited requests for info and if you are denied knoweledge
of specific trades, you can't really claim a failure to disclose because
you'd be claiming a failure to disclose something that was specifically
beyond your ability to know about or inquire after.
Joseph Gwinn
Ex post facto (in other words) was one of Buffet's arguments. We shall see.
Joe Gwinn
John R. Carroll
I'm sure it was. People make specious arguments every day. Even people like
Warren Buffet.
The best and most productive argument made so far have been the donations BH
has made to Ben Nelson. It got the desired result and that is something a
court won't provide under these circumstances. A better argument to any
court would be the forced disclosure of proprietary trading information.
>We shall see.
Unlikely. Buffet won't pursue a lost cause.
--
John R. Carroll
John R. Carroll
> On Mon, 19 Apr 2010 16:43:04 -0800, John R. Carroll wrote:
>
>> Warren Buffet, for example, called derivative products weapons of
>> mass financial destruction or something like that. He spent 400
>> million dollars to get them out of General RE and to get General RE
>> out of that business. Warren Buffet, John Bogle, Ed Gramlich - the
>> list is very long, learned, experienced, and distinguished.
>>
> The real scandal is that those folks got punished because they missed
> the profits of speculation before the bubble burst, and then missed
> the TARP and other bailouts, because they were financially sound.
Ed Gramlich was at the NY Fed at the same time Timothy Geithner was and he
published a brief but comprehensive analysis of the mortgage market and
government policies in support of both the residential and commercial
housing/rental markets. Unless his 401K was self directed, he didn't hit on
or miss anything and in the end, he's just dead.
John Boggle runs one of the worlds most successful and stable funds and
Buffet prevented General RE from looking like AIG.
They are both leveraging their strength's to good advantage.
Financially sound financial institutions were the beneficiaries of TARP
money to the same extent the public and unsound companies were.
Saving Chrysler and GM went too far but they are peanuts by comparison to
the trillions of dollars Treasury and the Federal Reserve has committed in
order to prevent the collapse of the financial services industry not to
mention the possible collapse of society as we know it.
>
> Just like the residential mortgages---folks who bought a house they
> could pay for, and who didn't second-mortgage their equity when
> prices peaked, will end up helping to bail out their less responsible
> brethren. I really hope that the mortgage readjustment programs will
> have some sort of a claw-back clause, because it would really be
> unfair if people would be able to get their mortgage reduced now, and
> then profited from eventual real estate appreciation. My suggestion
> would be to help underwater mortgages by extending a
> zero-interest-rate loan for the negative equity amount, that stays
> with the property until the appreciation wipes it out.
The moral hazard in this particular instance is real but relatively trivial.
Anyone I know would be tickled to death if the only cloud on the horizon was
moral hazard in the residential mortgage cram down process.
Really, and so would you be.
>
> By the way, if the government bailed out institutions that made the
> wrong bets, who is on the other side of the trade? I read that 10 to
> 20 B$ of AIG bailout went directly to foreign counterparties.
Counterparties got a lot more than $20 Bn but we will never know how much or
who. That's the law, distasteful or unfair as that may seem.
Simple loss ratio's would indicate somewhere in the neighborhood of $350 Bn
altogether and that's pretty cheap.TARP just bridged the gap. It didn't
shoulder the entire burden. I wouldn't be surprised to learn that the actual
accounting over a three or five year period was in the neighborhood of Three
Trillion dollars. That would represent a five percent loss ratio.
>I would
> like for someone to do a global accounting of this money flow, and
> see a global picture.
I don't know why you'd want to see that. I'll be satisfied to know all of
that going forward and that's what's possible.
What you'd like to see isn't.
--
John R. Carroll
John R. Carroll
> On Mon, 19 Apr 2010 14:48:20 -0800, John R. Carroll wrote:
>
>> Trading derivatives on an open exchange would cause the market to
>> work appropriately.
>> You'd be able to see the Goldman divisions operating in real time.
>> Investors aren't stupid, they just can't see in the dark.
>> Transparency is the key. The CFMA of 2000 turned out the lights.
>
> Agreed, even with transparency it may be hard to compete with them. Do
> you know that major stock exchanges sell co-location space in their
> computer enters, which gives big players who can afford it a, say, 1ms
> latency to the transaction stream instead of 1 s that everybody else
> sees?
Poorly written trading programs and goofy product integration are bigger
contributors to latency today that connectivity - by far.
>Remember the Russian guy who was arrested for stealing computer
> code from Goldman Sachs
>
> http://www.wired.com/threatlevel/2009/07/aleynikov/
>
> He was doing this kind of thing. No wonder GS went ballistic, and FBI
> obliged.
High frequency trading is something that would be easy to deal with.
All you'd have to do is impliment a rule and time stamp the products.
A 20 minute mandatory retention period would not be unreasonable and it
would minimize or eliminate sniping and snipping for profit.
Even EBay could do this and cut out automated sniping completely. There
wouldn't be any advantage if a seller could refuse a lowball bid made within
limits of the end of an auction and in the absence of competitive bidding.
--
John R. Carroll
Bill McKee
"Joseph Gwinn" <joeg...@comcast.net> wrote in message
news:joegwinn-537B4B...@news.giganews.com...
Is not ex-post facto. Is changing the rules going forward. He could sell
his CDO's before the new law took effect.